Gold was down (at press time) $23.30 (-1.4%) for the week to $1,631.70, and silver was up $0.10 (+0.3%) to $31.68. Gold and silver recovered Thursday after falling 3.5% and 6.7% respectively Wednesday, which Bloomberg attributed to “signs that the Federal Reserve won’t provide more US economic stimulus, boosting the dollar and eroding the appeal of precious metals as alternative investments.”

According to Frank Lesh of FuturePath Trading, “The market has decided that yesterday’s statement is probably the final nail in the coffin” for those counting another round of quantitative easing. Lesh could be right, but it is important to note that “yesterday’s statement” was actually made March 13.

On Tuesday, IMF Managing Director Christine Lagarde brought her $500-million begging bowl to Washington and declared, “Americans might ask themselves, why should what happens in the rest of the world concern us? Don’t we have our own problems?” And then she dropped the other shoe: “If the European economy falters, the American recovery and American jobs would be in jeopardy. So America has a large stake in how Europe fares — and how the world fares.”

On Wednesday, Bloomberg reported that up to 1.25 million foreclosed houses are about to flood the already drowning US housing market, bringing excess inventory up to nine million units. On the same day, Reuters reported that 2012 is likely to be “a bigger year for foreclosures than 2010.” Zero Hedge argues, “There will be no housing bottom until the nine million excess homes clear. Period. Until then it is a buyer’s market, even if said buyer is unable to obtain bank financing, as ultimately it will be the seller who is forced to monetize (or vacate if underwater).”

So it is too early to conclude that the US “recovery” is a sure thing and that QE3 is off the table. Turning north, we see that David Frum has asserted in the National Post that “Under Stephen Harper, Canada can fairly claim to be the best-governed country among advanced democracies in the world. Thursday’s federal budget locks up Canada’s lead.”

How so? “Barring an unexpected slump into renewed recession, Thursday’s budget moves Canada to budget balance over the next three years. There will be no tax increases. Federal spending growth will be restrained, but outlays will still rise: from $272.9 billion in the year just ended to a projected $296.6 billion in 2015-2016.”

And how will Canada accomplish this? “Jim Flaherty’s plan allows spending to rise by 11.65% over five years. Over those same five years, revenues are expected to surge by 26%.”

It is interesting, and significant, that Frum provides more relevant numbers in his column than the federal government does in the 26-page version of what it calls, in its irritatingly Soviet style, the “Economic Action Plan 2012.”

The full budget document is 498 pages long and based on the immortal doctrine: If you can’t dazzle them with brilliance, baffle them with bullshit. Readers of this column will not be surprised that Harper and Flaherty have been so timid, but Andrew Coyne was. He warns in the Post, “Be under no illusion about this. The five years of ‘austerity’ on which we are now embarked will be, after inflation, adjusting for population growth, the five biggest spending years in the history of the country — other than the last three.”

Generous to a fault, Coyne concludes, “So we are at least headed in the right direction.” After all, “We are not going to go bankrupt.” Of course this optimism is based on Flaherty’s crystal ball, which assures us that federal revenues will rise almost 5% per year for the next five years. And this great prognosticator has never been wrong in recent history. Well, at least not since 2008.

So just as in the less-well-governed United States, our leaders are praying with all the fervour of a deathbed convert that the “recovery” is real and true. Short of that, they’re out of ideas. No, that’s too unkind. They have eliminated the penny, and God knows one hardly travelled anywhere in this great land without hearing the lamentations of the citizenry, their piteous supplications to Ottawa that it no longer press down upon the brow of labour this disc of copper.

In the Globe and Mail, Tim Kiladze notes the one-year anniversary of the end of the TSX bull market, and what a dismal year it’s been for gold and silver equities. In the Toronto Star, Bill Carrigan employs technical analysis to conclude, “We now have bullish [a] setup that could signal a pending bull market in the gold miners. Good news for the goldbugs and those nervous portfolio managers.”

At the Financial Post, Peter Koven reports that Chris Lichtenheldt of UBS Securities says that the above-mentioned First Majestic’s (TSX:FR) $175-million takeover of Silvermex (TSX:SLX) should be a “good fit.” That said, he has lowered his price target from $18.75 to $18.50 (again, currently $15.63).

At Seeking Alpha, Vince Martin notes that Thompson Creek’s (TSX:TCM) Mount Milligan gold-copper project “is now at least 50% above its current budget, with the overruns representing between $3 and $4 per share.” The project is now underfunded by $230 million. Even so, “If the company can execute for the next 18 months and bring Mt. Milligan online in the fourth quarter of 2013 at even the high end of its capex range,” then TCM “is a good long-range play.”

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